The markets have surged this year -- with the Dow closing at record highs 22 times -- partially as a result of the central bank's massive quantitative easing program. Wall Street has been keeping close tabs on when the Fed may begin tapering the $85 billion a month in bonds it is buying.

Two key events Wednesday are expected to shed more light on the Fed's plans. Chairman Ben Bernanke will testify before the Congressional Joint Economic Committee at 10:00 a.m. ET. He is expected to give his latest update on the U.S. economy, and provide insights on the direction of monetary policy. The economy has shown considerably signs of improvement of late, with the housing market rebounding and the labor market still adding jobs -- but the recovery has still been choppy.

"We expect Mr. Bernanke to confirm the Fed’s accommodative policy stance, while not explicitly mentioning the timing of tapering asset purchases," analysts at Barclays wrote in an email to clients.

Later, at 2:00 p.m. ET, the Fed releases minutes from its two-day policy setting meeting that ended May 1. The report provides information on the discussions policymakers had during the meeting, and may also hint at how soon the pullback in bond buying may begin.

New York Fed President William Dudley also made remarks Tuesday that were seen as dovish by analysts.

"In terms of our asset purchase program, I believe we should be prepared to adjust the total amount of purchases to that needed to deliver a substantial improvement in the labor market outlook in the context of price stability," he said in a speech in New York. "Because the outlook is uncertain, I cannot be sure which way—up or down—the next change will be."

Also on the economic front, the National Association of Realtors reveals its latest look at existing home sale. Economists expect sales of existing, single-family homes to have climbed to an annual rate of 4.99 million units in April from 4.92 million the previous month.

In corporate news, Target (TGT) revealed quarterly profits and sales that missed expectations. Lowe's (LOW) posted quarterly results that missed estimates on the top and bottom lines. Pfizer (PFE) said it will split off the remainder of Zoetis (ZTS), which was its animal-health unit.

Gold prices rallied $15.40, or 1.1%, to $1,393 a troy ounce. Oil dipped 55 cents, or 0.57%, to $96.16 a barrel. Wholesale New York Harbor gasoline slumped 0.61% to $2.828 a gallon.

Foreign Markets

The English FTSE 100 fell 0.29% to 2814, the English FTSE 100 dipped 0.04% to 6801 and the German DAX ticked lower by 0.09% to 8465.

In Asia, the Japanese Nikkei 225 surged 1.6% to 15627 and the Chinese Hang Seng tilted lower by 0.45% to 23261.